Investigation bill poses threat to partnerships

Partnering arrangements between buyers and suppliers could be under threat if the government's Regulation of Investigatory Powers (RIP) Bill becomes law, industry experts have warned.

Confidentiality of information, a pillar of such deals, will cease to exist if the police wins the authority to demand encryption codes to e-mails as part of criminal investigations.

"The legislation will see purchasers being caught in an extremely uncomfortable position," said Dick Jennings, a partner at legal firm Ford and Warren and member of CIPS's legal committee.

"Typically, there would be an encryption code in place, so that a supplier's information would be secure," he added. "But if the government fingers a buyer's collar and asks them for the code in order to watch that supplier, confidentiality vanishes."

The bill would place buyers in a catch-22 situation. Under it, they would not be able to tip off a supplier that its information is being passed to the police, as that would be a breach of confidentiality in itself. If they did tip off a supplier, they and their company would be liable for fines.

"We believe that the bill will deter UK businesses from exploiting the potential of e-procurement, deter businesses worldwide from routing electronic communication through the UK, and harm the economy," said Melinda Johnson, CIPS's head of policy, in a submission to the Home Office earlier this year.

A highly critical recent study by the London School of Economics and Internet service provider Claranet estimated that the UK would lose £46 billion worth of business, as companies would move overseas to escape the interception powers.

Up to 30 e-commerce and Internet companies could be among those fleeing, possibly to Ireland, where the government has excluded disclosure of encryption keys in a similar bill.

Interception powers were proposed originally as part of the Department of Trade and Industry's Electronic Communications Act, which took effect last month. It received a positive response from industry, mainly because the interception powers were dropped.

The powers were intended to be included in the RIP Bill, which is now before the House of Lords and due to be passed by the end of July, said a Home Office spokesperson.

"It's very 'big brother is watching you'," said Kevin Ginty, technical manager at the Centre for Electronic Commerce at the University of Sunderland. "I think it will destroy trust in relationships and be very damaging to purchasing departments."

Ginty feared that the handing over of an encryption code will be like giving police a skeleton key and, most importantly, future data from suppliers.

"And that code might be used to access data for more than one of that company's suppliers," he said. "There has to be a balance between giving police investigatory powers and keeping trust in a business relationship."